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“Medibank remains in a strong and sound capital position. Capital is sufficiently in excess of the prudential minimum that provides security to future benefits."

He said Medibank has capital reserves of $2 billion to $2.2 billion.

In regards to the government’s proposed means testing of the health fund rebate, Mr Sammells said that Medibank had undertaken internal modelling in the past six weeks on its likely impact on membership, but added the caveat of the results were “fraught with difficulty".

For example, membership data of its 3.7 million members does not include income levels.

“Our best educated guess to ourselves ... that potentially 1 per cent of members would lapse on their product as a result," he said, adding that 2.5 per cent may downgrade from top hospital cover to a medium hospital product.

He said the 3.7 million are lives undercover, rather than policies held, so a family membership might have one family policy.

“So if I was to translate those percentages to policies, I suspect 15,000 being that 1 per cent number (drop in cover), and a further 38,000 potentially might consider downgrading."

The government has previously estimated that nationally, 25,000 people may give up their private health cover if the planned changes went ahead.

Opposition health spokesman
Peter Dutton
said the government’s own health fund says it will lose more members than Health Minister
Nicola Roxon
is predicting for the whole industry.

“Labor has cooked the books," Mr Dutton said. “Their policy is going to kill private health insurance and just drive people into already overstretched public hospital."